Save on Summer Travel Taxes

Income and Investments

What comes to mind when you think of summer? Sun, beach, relaxing, travel? Very few people equate summertime with taxes, but you’ll be surprised how many taxes you’ll pay when you travel this summer.

According to a study by the National Business Travel Association,  travelers shell out over $100 in sales, hotel, rental car and other extra taxes on an average three-day trip.

Gasoline taxes

If you are driving on your summer vacation, be prepared to pay a lot in gasoline taxes. As of April 2014, federal and state excise and sales tax on gasoline averaged 49.9 cents per gallon for gas.

You’ll pay the most if you fill up in California (71.3 cents) and the least in Alaska (30.8 cents), though that’s quite a distance to travel for a tank of gas for most of us.

The next lowest state is New Jersey at 32.9 cents, and most of the southern states have taxes under 40 cents. Fill up in New York or Hawaii and expect to pay about 68 cents a gallon in taxes.

You can find a chart of the gasoline taxes in each state on Wikipedia – if your trip will take you across several state lines, use that chart as a guide to plan your trip so you can fill up in a lower-tax state just before you cross the state line, or delay filling up in a high-tax state until you emerge into a lower-tax state.

Airline taxes

If you travel by air, you’ll pay even more, thanks to a variety of air transportation taxes. There’s a 7.5% tax on the base ticket price, a domestic segment tax of $4.00 per person per segment (a single takeoff and single landing), an international travel facilities tax of $17.50 per person for flights that begin or end in the U.S. and $8.70 per person for a flight that begins or ends in Alaska or Hawaii.

If you are shipping anything, expect to pay 6.25% for a tax on transporting property by air.

Since you pay taxes each time you take off and land, booking non-stop flights will save some taxes, though they might be more expensive overall than itineraries with multiple flight segments.

Other travel taxes

Taxes for other travel expenses also vary from city to city. If you spend time in Windy City Chicago, expect to be blown away by the highest taxes in the country.

In Chicago, you’ll pay about $17 a night for hotel tax plus almost $15 a day for tax on a rental car. Eat downtown and you’ll pay 10.75% restaurant taxes as well. That means you’ll shell out around $117 in taxes for a long weekend stay.

If you want to cut those taxes in half, spend the weekend in Portland for just $60 in taxes, or for just a few dollars more in taxes visit Fort Lauderdale, Honolulu and Detroit.

 

 

 

Comments (1) Leave your comment

  1. Your advice on travel & lodging tax savings mentions Portland, but not whether this is Oregon or Maine. Would be helpful to know which.

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